Kea Spuds Puka 2 Well in New Zealand

New Zealand-focused Kea Petroleum announced Wednesday that it has begun drilling on its Puka 2 onshore well in the country's producing Taranaki Basin.

Kea has already had success with a commercial discovery at its Puka 1 well in the basin, but on Tuesday it spud Puka 2 – which it plans to drill to a depth of 6,200 feet. The firm also expects to temporarily suspend drilling at approximately 1,310 feet in order to allow for the commencement of a 3D seismic program over the area in mid-December.

Puka 2 is designed to appraise the Puka field and test whether the Puka 1 discovery is a stratigraphically-controlled field, rather than a simple structure. As simple structure, Kea aid it remains confident that the discovery could contain as much as three million barrels of oil, but should it prove to be stratigraphically controlled it could contain as much as 10 million barrels.

Kea Chairman Ian Gowrie-Smith said the firm aims to turn Puka into a field that produces 2,000 barrels of oil per day as soon as possible, but in a separate statement Wednesday Gowrie-Smith added that next year will also be a busy time for the company.

"January 2013 will see the beginning of an energetic year of exploration activity starting with Mauku 1 which is 50-percent funded by Methanex and negotiations to farm out an interest in Mauku are expected to be concluded shortly. The imminent drilling of Mauku could be the greatest possible value changer for the company. Our exploration program is mapped out into 2014 and as the balance between production and exploration becomes more apparent I look forward to this being reflected in shareholder value," said Gowrie-Smith.

Gowrie-Smith also said that following the completion of an $11 million fund raising (achieved in early November), Kea now has the cash need to give it the flexibility it needs to enact its plans.

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